Punjab-Haryana High Court
Som Nath vs Punjab State Water Resources … on 2 April, 2025
Neutral Citation No:=2025:PHHC:045700
1
CWP-22009-2022
2022
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
262 CWP-22009
22009-2022
Date of decision: April 02, 2025
SOM NATH
....Petitioner
Versus
PUNJAB STATE WATER RESOURCES MANAGEMENT AND
DEVELOPMEN CORPORATION LIMITED THROUGH ITS MANAGING
DIRECTOR
.....Respondent
CORAM: HON'BLE MR. JUSTICE DEEPINDER SINGH NALWA
Present:- Mr. A.S Walia, Advocate
for the petitioner.
Ms. Monika Sharma,
Sharma, Advocate for the respondent.
*****
DEEPINDER SINGH NALWA,
NALWA J.
In the present writ petition, the petitioner has challenged the order
dated 2.8.2022 (Annexure P-4),
P whereby, the case of the petitioner for grant of
balance amount of gratuity amounting to Rs.8,96,434/
Rs.8,96,434/- due to the petitioner on
n
attaining the age of superannuation,
superannuation has not been considered on the ground that
the matter is pending for clarification in the office of the Directorate of Public
ic
Enterprise and Disinvestment, Punjab.
Briefly stated, the facts of the case are tthat
hat the petitioner retired
from the post of Personal Assistant from Punjab State Water Resources
Management and Development Corporation Limited (hereinafter referred to as
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`the Corporation’) on attaining the age
age of superannuation on 30.9.201
30.9.2019.
9. As per
the petitioner, the petitioner was entitled for payment of gratuity amounting to
Rs.18,96,434/- as per Bye Law No. 18 off the Employees Service Bye Laws of
the Corporation. However, on retirement of the petitioner, an amount of
gratuity amounting to Rs.10,00,000/-
Rs.10,00,0 was paid to the petitioner on 2.3.2020.
020.
As the petitioner was entitled for grant of gratuity amounting to Rs.18,
Rs.18,96,434/-,,
the petitioner submitted a representation dated 20.01.2022 to the respondent–
Corporation for grant of balance amount of gratui
gratuity.. No decision was taken by
the respondent on the above said representation
representation. As a consequence of this, the
petitioner filed a writ petition in this
his Court bearing CWP
CWP-9061-2022.
2022. The
above said writ petition was disposed of by this Court vide order dated
11.5.2022, whereby,
whereby direction was
as given to the respondent to pass an
appropriate speaking order on the representation dated 20.01.2022 filed by the
petitioner within
ithin a period of eight weeks. It was further directed that in case
the petitioner was found entitled for any benefit, the same would be released in
his favour within a period of four weeks thereafter.
In pursuance to the order passed by this Court on 11.5.2022 in
CWP-9061-2022,
2022, the respondent passed
assed an order dated 22.8.2022 (Annexure P–
4). A perusal of the above said order shows that the stand taken by the
respondent-Corporation
Corporation was that as the clarification in this regard is still
pending before the Finance Department, as such, no action can be taken in the
matter. It has further been stated in the impugned order that as and when the
clarification is received by
by the concerned office, the decision will be taken
accordingly.
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Aggrieved
ggrieved against the above said order dated 2.8.2022 (An
(Annexure
nexure
P-4) passed by the respondent,
respondent, the petitioner has filed the present writ petition.
Learned counsel appearing on behalf of the petitioner submits that
in view of the relevant bye-laws and amendment made in the Payment of
Gratuity Act, 1972, vide notification
notification No. S.O
S.O-1420(E)
1420(E) dated 29.3.2018
(Annexure P-5),
5), the petitioner is entitled for grant of gratuity of an amount of
Rs.18,96,434/-..
Learned counsel appearing on behalf of the respondent submits
that in the light of the letter dated 13.9.2019 issued by Government of Punjab,
Department of Finance, the Government of Punjab is yet to revise the gratuity
rates and no such revision can be carried out without the approval of the
Finance Department. It is the case of the respondent
respondent-Corporation
ion that the
Board of Directors in its 53rd meeting held on 27.9.2022
27.9.2022, have taken a decision
to limit the amount of
o gratuity to the employees of the Corporation to a
maximum of Rs.20 lacs. As per the respondent
respondent-Corporation,
Corporation, letter has been
issued to the Finance
inance Department for clarification regarding implementation of
recommendation of 6th Pay Commission regarding pension and other retiral
benefits to employees
employe s who have retired on or after 1.1.2016. But till date, the
matter is pending in the office of Directorate
Directorate of Public Ent
Enterprises
erprises and
Disinvestment. As
As and when, clarification will be received from the concerned
office, necessary action will be taken in regard to grant of balance amount of
gratuity.
I have heard learned counsel for the parties at len
length
gth and
thoroughly perused the records of the case.
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The issue involved in the present writ petition is as to whether the
petitioner is entitled for grant of gratuity as per the amendment made in the
Payment of Gratuity
Gratuity Act, 1972 notified on 29.3.2018 (Annexure P-5)
5)
enhancing the limit of gratuity from Rs.10,00,000
10,00,000/- to Rs.20,00,000/- w.e.f
29.3.2018. Similar
imilar issue came up for consideration befo
before a Co-ordinate Bench
of this Court in CWP No. 1691 of 2019 (Yadbinder Pal Singh vs. Punjab
Water Resource
ce Management and
and Development Corporation Ltd.) decided on
29.08.2023. In the above said case, the petitioner retired from the post of Law
Officer from the respondent-Corporation.
respondent Corporation. One of the claim in the above said
writ petition was that the petitioner was
as entitled for grant of payment of
gratuity as per the amendment made in the Payment of Gratuity Act, 1972
notified on 29.3.2018 and the bye-laws
b aws of the Corp
Corporation.
oration. It was held that the
letter dated 13.9.2019
13.9.2019 had nowhere denied the claim of the enhance
enhanced
d payment
of gratuity from Rs.10,00,000/-
Rs.10,00,000/ to Rs.20,00,000/
Rs.20,00,000/- and only suggested the
concurrence of Finance Department.
Department. The letter dated 13
13.9.2019
.9.2019 cannot
contravene the statutory provisions
p of the of the Payment of Gratuity Act,,
1972. Itt was also held that the amendment in the Payment of Gratuity Act
1972 would automatically become applicable to the respondent
respondent-Corporation
Corporation
and it would be the statutory obligation for the respondent
respondent-Corporation to
comply with the Provisions of Payment of Gratuity Act
Act, 1972
The relevant extract of the judgement is reproduced as under:
“12.
12. The objection for non-payment
non payment of gratuity by referring the
instructions dated 13.09.2019 annexed with written statement as
Annexure R-1
R 1 and also on the plea that petitioner has not soughtt
quashing of the same, such a plea by the respondent denying the
claim of petitioner is not acceptable. The bare perusal of the said4 of 11
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2022notification shows that since the Central Government in exercise
of the powers conferred by Sub-Section
Sub Section (3) of Section 4 ooff the
Payment of Gratuity Act, 1972 has specified the amount of
gratuity payable to an employee under the said Act and same was
issued prior to the date of retirement of the petitioner i.e. before
30.06.2018. The amendment in the Gratuity Act, 1972
automatically became applicable to the respondent
automatically respondent-Corporation
Corporation
and it is the statutory obligation to comply with the provisions of
this Act. The petitioner has already received an amount of Rs.10
lacs qua gratuity, therefore, his claim for the balance amount is
maintainable under the Act as well as in view of the Notification
maintainable
dated 29.03.2018. Further, the plea of the respondent
respondent-Corporation
Corporation
by referring the notification issued by Finance Department is also
not tenable as the provisions of the Gratuity Act, 1972 sha
shall
ll
prevail over all other instruments or contracts so far as the
gratuity is concerned and the right to receive under the Gratuity
Act cannot be defeated by any instrument or contract. The Hon’ble
Supreme Court in “Allahabad Bank Vs. All India Allahabad Ba
Bank
nk
Retired Employees Association”, 2010 (1) SCT 531 has already
dealt with the similar issue and while considering the provisions of
the Payment of Gratuity Act, 1972; has held as under:
under:-
“(a) There is no escape from payment of gratuity
under the provisionss of the Act unless the establishment is
granted exemption from the operation of the provisions of
the Act by the appropriate Government.
(b) Gratuity payable to an employee on the
termination of his employment after rendering continuous
service for not less
ss than 5 years and on superannuation or
retirement or resignation etc. being a statutory right cannot
be taken away except in accordance with the provisions of
the Act where under an exemption from such payment may
be granted only by the appropriate Gover
Government
nment under
Section 5 of the Act which itself is a conditional power. No5 of 11
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2022exemption could be granted by any Government unless it is
established that the employees are in receipt of gratuity or
pension benefits which are more favourable than the
benefits conferred
ferred under the Act.
(c) In view of the overriding provisions contained in
section 14 of the Payment of Gratuity Act, the provision for
gratuity under the Pension Rules will have no effect.
Possibly for this reason, section 5 of the Payment of
Gratuity Actt has conferred authority on the appropriate
Government to exempt any establishment from the operation
of the provisions of the Act. if in its opinion the employees of
such establishment are in receipt of gratuity or pensionary
benefits not less favourable than the benefits conferred
under this Act. [Municipal Corporation Delhi v. Dharam
Prakash Sharma & Ors., 1999(2) SCT 297]
(d) An establishment is under the statutory obligation
to pay gratuity as provided for under Section 4 of the Act
which is required to be read along with Section 14 of the
Act which says that the provisions of the Act shall have
effect notwithstanding anything inconsistent therein
contained in any enactment or in any instrument or contract
having effect by virtue of any enactment other than this Act.
(e) The provisions of the Act prevail over all other
enactment or instrument or contract so far as the payment
of gratuity is concerned. The right to receive gratuity under
the provisions of the Act cannot be defeated by any
instrument or contract.
(f) In Hindustan Lever and Anr. v. State of
Maharashtra & Anr., (2004) 9 SCC 438 relying upon the
decision in Purshottam H. Judye v. V.B. Poddar, (1966) 2
SCR 353, it was held that the word ‘instrument’ would
include award made by the Industrial Tribunal.
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(g) Section 2(d) of the Act defines Controlling
Authority as an authority appointed by the appropriate
Government under Section 3 of the Act. Under Section 3 the
Controlling Authority is made responsible for the
administration of the Act and it ffurther
urther provides for
appointment of different authorities for different areas.
Section 7 deals with for determination of the amount of
gratuity. Every person who is eligible for payment of
gratuity under the Act is required to send a written
application to the employer in the prescribed form for
payment of such gratuity. Sub
Sub-section
section (2) of Section 7
provides once the gratuity becomes payable, the employer
shall, whether an application has been made or not,
determine the amount of gratuity and give notice in writing
to the person to whom the gratuity is payable and also to
the Controlling Authority specifying the amount of gratuity
so determined and arrange to pay the amount of gratuity to
the person to whom the gratuity is payable. The Scheme
envisaged under Section 7 of the Act, is that in case of any
dispute to the amount of gratuity payable to an employee
under the Act or as to the admissibility of any claim of, or in
relation to, an employee payable to gratuity etc. The
employer is required to deposit with the Controlling
Authority the admitted amount payable as gratuity. In case
of any dispute parties may make an application to the
Controlling Authority for deciding the dispute who after due
inquiry and after giving the parties to the dispute, a
reasonable opportunity of being heard, determine the matter
or matters in dispute and if, as result of such inquiry any
amount is found to be payable to the employee, the
Controlling Authority shall direct the employer to pay such
amount to the employee. Subsection (7) of Section 7,
provides for an appeal against the order of the Controlling
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Authority. The Act, nowhere confers any jurisdiction upon
the Controlling Authority to deal with any issue under sub
sub–
section (5) of Section 4 as to whether the terms of gratuity
payable under any Award or agreement or contract is more
beneficial to employees than the one provided for payment
of gratuity under the Act. This Court’s order could not have
conferred any such jurisdiction upon the Controlling
Authority to decide any mat
matter under sub-section
section (5) of
Section 4, since the Parliament in its wisdom had chosen to
confer such jurisdiction only upon the appropriate
Government and that too for the purposes of considering to
grant exemption from the operation of the provisions of tthe
he
Act.”
13. It is a settled proposition of law that an authority cannot issue
orders/office memorandum/executive instructions in contravention
of statutory rules and instructions can be issued only to
supplement the statutory rules but not to supplant it. Such
instructions should be subservient to the statutory provisions,
whereas the notification dated 30.09.2019 has nowhere denied the
claim of enhanced payment of gratuity from Rs.10 lacs to Rs.20
lacs as per Gratuity Act, 1972 (Amended Act 2018), and onl
onlyy
suggested for concurrence of Finance Department. The
respondent/Corporation was advised to have prior approval of
Finance Department which is not binding upon the petitioner
being merely the instructions and same cannot contravene the
statutory provisions
provisions of Gratuity Act. The Hon’ble Apex Court in
the case of “Employees’ State Insurance Corporation Vs. Union of
India” (2022) 11 SCC 392 has held under:
under:-
“15. A Constitution Bench in Sant Ram Sharma v.
State of Rajasthan [Sant Ram Sharma v. State of Rajasthan,
AIR 1967 SC 1910: (1968) 1 SCR 111] considered the
applicability of the letters issued by the Government of
India detailing the administrative practi
practice
ce for promotions,8 of 11
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2022against the Indian Police Service (Regulation of Seniority)
Rules, 1954. The Constitution Bench held that: (AIR p.
1914, para 7)
“7. We proceed to consider the next contention of Mr
N.C. Chatterjee that in the absence of any statutory ru
rules
les
governing promotions to selection grade posts the
Government cannot issue administrative instructions and
such administrative instructions cannot impose any
restrictions not found in the Rules already framed. We are
unable to accept argument as correct
correct.. It is true that there is
no specific provision in the Rules laying down the principle
of promotion of junior or senior grade officers to selection
grade posts. But that does not mean that till statutory rules
are framed in this behalf the Government cann
cannot
ot issue
administrative instructions regarding the principle to be
followed in promotions of the officers concerned to selection
grade posts. It is true that Government cannot amend or
supersede statutory rules by administrative instructions, but
if the rules
les are silent on any particular point Government
can fill up the gaps and supplement the rules and issue
instructions not inconsistent with the rules already framed.”
16. In Union of India v. Ashok Kumar Aggarwal [Union of India
v.Ashok Kumar Aggarwal, (2013)
(2013) 16 SCC 147: (2014) 3 SCC
(L&S) 405] a two-
two Judge Bench of this Court speaking in the
context of service regulations governing a departmental enquiry
reiterated that an office order or office memorandum cannot
contravene statutory rules. B.S. Chauhan, J. noted the position in
law in the following terms: (SCC p. 172, para 59)
“59. The law laid down above has consistently been
followed and it is a settled proposition of law that an
authority cannot issue orders/office memorandum/executive
instructions in contravention of the statutory rules.
However, instructions can be issued only to supplement the
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statutory rules but not to supplant it. Such instructions
should be subservient to the statutory provisions. (Vide
Union of India v. Majji Jangamayya [Union of India v.
Majji Jangamayya, (1977) 1 SCC 606 1977 SCC (L&S)
191], P.D. Aggarwal v. State of U.P. (P.D. Aggarwal v.
State of U.P., (1987) 3 SCC 622 1987 SCC (L&S) 310],
Paluru Ramkrishnaiah v. Union of India (Paluru
Ramkrishnaiah v. Union of India, (1989) 2 SCC 541: 1989
SCC (L&S) 375], C. Rangaswamaiah v. Karnataka
Lokayukta [C. Rangaswamaiah v. Karnataka Lokayukta,
(1998) 6 SCC 66: 1998 SCC (L&S) 1448] and Joint Action
Committee of Air Line Pilots’ Assn. of India v. DG of Civil
Aviation [Joint Action Commi
Committee
ttee of Air Line Pilots’ Assn. of
India v. DG of Civil Aviation, (2011) 5 SCC 435])”
14. In view of the above, the impugned chargesheet dated
25.7.2018 (Annexure P-3),
P 3), order dated 4.12.2018 (Annexure P
P-7)
7)
and all proceedings emanating and having taken plac
placee thereupon
stand quashed. The respondents are directed to recalculate the
amount due to the petitioner, qua his retiral benefits including
balance amount of leave encashment and gratuity in accordance
with law, which shall be paid within 3 months from the date of
receipt of copy of certified copy of this order; the petitioner is
entitled to interest @ 6% per annum simple from the date of his
retirement till the period of 3 months from today and if the
retirement dues are not paid within this period then fo
forr future,
period petitioner will be entitled to interest at the rate of 9% per
annum simple till its realisation.
A perusal of the facts of the present case would show that the
petitioner retired on 30.9.2019 after the amendment made in the Payment of
Gratuity Act,, 1972.
1972 The petitioner has already received
ceived an amount of
Rs.10,00,000/- qua gratuity. The petitioner is held entitled for balance amo
amount
nt
of gratuity as per the amendment in the Payment of Gratuity Act, 1972
1972.
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In view of the above, the present writ petition is allowed. The
order dated 2.8.2022 (Annexure P-4)
P 4) is quashed. The respondent is directed to
recalculate the gratuity in terms of the
t amendment made in the Payment of
Gratuity Act,, 1972.
1972. The amount due to the petitioner towards ggratuity
ratuity should
be paid within a period two months from the date of receipt of a certified copy
of this order. The petitioner is also entitled to interest @ 6% per annum on the
arrears of balance amount of gratuity from the date it was due till actual
realisation
isation of the amount.
amount
(DEEPINDER SINGH NALWA)
April 02, 2025 JUDGE
ritu
Whether speaking/reasoned Yes/No
Whether reportable: Yes/No
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